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Tuesday, November 18, 2008

IMF needs US$100b more

'The question is to be able to face the problem in six months from now, and I think all the heads of state and government are aware of the need for a strong IMF,' said Mr Strauss-Kahn. -- PHOTO: AP

PARIS - THE International Monetary Fund needs US$100 billion more (S$152 billion) over the next six months to cope with increased demand, its chief said in an interview aired on Monday.

'The number of countries having problems at the same time has dramatically increased and they come to the IMF asking for support. So we need more resources,' the fund's head Dominique Strauss-Kahn told the BBC.

'The question is to be able to face the problem in six months from now, and I think all the heads of state and government are aware of the need for a strong IMF,' he said. Countries should also do more to tackle the economic crisis, Strauss-Kahn said, notably by cutting interests rates and using government finances.

'In some parts of the world - Japan, the United States - interest rates have been cut very much, but it can be done more aggressively in other parts,' he said, suggesting the European Central Bank, in particular, should consider such a cut.

Although the ECB lowered its interest rates earlier this month to 3.25 per cent, critics fault it for being slow to cut its rates.

Strauss-Kahn's remarks come amid deepening economic strains, with Japan becoming the latest victim of recession and markets showing little initial enthusiasm for last weekend's Group of 20 summit in Washington which produced pledges for reform but little concrete action.

The IMF chief has nonetheless praised the outcome of the summit. He also told the BBC that Japan's plan to lend the fund 100 billion dollars meant it now 'had enough resources to address the problem we are facing today.'

He said the fund would try to offer the most vulnerable chunk of the population 'some sort of a safety net' to protect them from the hardships of dealing with the crisis. -- AFP